What Price Art?

Post from Jean Thilmany:

Jean Thilmany

I come from a long line of antiquers—or junkers as my grandma calls us—who scour back alleys, thrift shops, and garage sales for items that cost only a few bucks but are of value to us (like a 1950s teenybopper romance novel for me, or a Depression-era glass vase for grandma). But we also seek that one woebegone piece of junk overlooked by everyone else that we know to be worth $400 more than the $14 asking price!

Everybody loves a find. Whole television shows, like Antiques Roadshow, and American Pickers are built around this simple get-rich-quick concept. Problem is that you pretty much have to be a specialist in a particular field to know what something will sell for “at auction”—eBay or Sotheby’s.

I’ve always been curious about why items, particularly paintings, fetch the prices they do at auction. The whole pricing structure seems so capricious. But now, Arzu Aysin Tekindor, an artist and economics PhD candidate at Washington State University in Pullman, Wash., has devised an economic model that gets at that question.

The model reveals why some paintings sell for astronomical prices, like the record auction price of $120 million fetched for Edward Munch’s The Scream earlier this summer. The Munch painting brought so much because it’s The Scream, which is arguably a part of popular culture today. Think of Macaulay Culkin making his memorable face in the Home Alone movie posters.

Tekindor ran her analysis by calculating how each of some 60 characteristics contributed to the overall price. She ranked the auction-house prices of more than 1,100 paintings chosen at random from the lifeworks of 15 great artists, including Pablo Picasso, Gustav Klimt, and Salvador Dali. She also gauged their popularity by counting Google hits on the artists, which corresponded closely with the millions of dollars that their works fetched.

She found that a mere 1 percent increase in an artist’s Google hits increases the average price of his or her work by 28 percent.

The research has implications for both artists and consumers, says Tekindor. Artists, she says, will do well to keep in mind that their style and the objects they portray can have big impact on their career. Consumers should also bear in mind an artist’s style and content, not just his or her name.

That information helps clear up some of the mystery behind auction prices and it’s good to know should I ever get into art collecting. But realistically, I think I’ll probably be sticking to collecting used paperback books.

6 Responses to “What Price Art?”

  1. July 19, 2012 at 12:38 am

    It is very difficult to put a price on art. Even for the work of the legendary ones, pricing is very hard to project.

  2. December 20, 2012 at 7:28 am

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  3. August 24, 2013 at 6:22 pm

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The Editor

John G. Falcioni is Editor-in-Chief of Mechanical Engineering magazine, the flagship publication of the American Society of Mechanical Engineers.

July 2012

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